What is the diference between insurance composite rating?

Question

what is the diference between insurance composite rating and loss cost rating?

Answer 1

Hm.   They aren't comparable, the way I'm thinking of it.

Composite rating is common for large auto fleets with high turnover.  Each class code (or sometimes several classes are bunched together) is given a rate.  So a large truck would be, $1000 per year.  Period.  Every time a large truck is added or deleted, the AGENT would type up the endorsement, pro-rate the premium, and send a copy to the company, and a copy to the insured, as the rate for each vehicle in that class is pre-determined.

Sometimes, instead of changing premiums as you go along, the policy is charged based on the exact exposures at a certain date - once a month, once a quarter, or once a year - resulting in an "audit" of the composite rated auto policy, after it expires.

I've only seen loss cost rating applied to workers comp.  That's when the state workers comp rating board promulgates "loss costs" for each class code, then each company can apply modifiers to the loss costs, to get their particular rates.  

So because you can't really compare the two, you can't really differentiate between the two.  Which is why I've explained the two.